Can Wifi Really Be a Differentiator for JetBlue?

When JetBlue first launched, it used inflight entertainment as one of the greatest initial product differentiators of all time, and now it’s trying to do it again with a new breed of wifi. Is this really going to have the same impact? I’m far from convinced, but it’s an interesting play.

I imagine most of us know the JetBlue story. When the airline launched over a decade ago, it was the first to put live television in an airplane. I seem to recall that the original plan was to charge for it, but in the end, the draw of the product was considered to be so important that it was offered for free. The brand was originally built around this, and it instantly communicated that JetBlue was a high quality kind of low cost carrier. It was a brilliant move.

Since that time, many have copied JetBlue’s original plan. Heck, Frontier and United actually use systems owned by JetBlue’s LiveTV subsidiary. But they aren’t the only ones. Delta introduced television on its failed JetBlue-competitor, Song. Song may have failed, but the TVs stuck around. And of course, Virgin America has it as well. But it now goes beyond that. You can watch a handful of live TV channels on Southwest on your own device, for example. This isn’t nearly the powerful differentiator it used to be.

Since that time, JetBlue has done a great job of building a strong brand, but it hasn’t found that next killer innovation. (Sorry, JetBlue, but those boxes of food that will survive a nuclear winter don’t count.) In fact, the airline has shown restraint when it comes to rolling out the next step in inflight entertainment… wifi.

Strangely enough, JetBlue was fairly early in deciding to try out wifi when it created its one test airplane, BetaBlue. The airline wrongly thought that people really just cared about checking email. So a slow, narrowband solution that would really only allow people to check email would work, right? No. Not at all. BetaBlue quietly lost its wifi along with its Yahoo and Blackberry logos.

Meanwhile, other airlines raced to install wifi. Most airlines in the US have gone with Gogo for their domestic offerings. The result is that wifi is widely available, but it’s not lightning-fast. Sometimes it slows to a crawl depending upon how many people are using it. (My wife was on a US Airways flight yesterday that had such slow connectivity that it was unusable.) And it also dies once you get over water, an issue for airlines that do a lot of flying to Hawai’i or the Caribbean. Southwest went with Row 44, and while the speeds aren’t terrible, they aren’t what you’ll find on the ground either. Southwest started off with a $5 per flight intro price, but that has since gone up to $8, still a bargain compared to what the other airlines charge.

While all this was happening, JetBlue sat around waiting for something new and better. Did the airline miss out on the chance to become like Virgin America and AirTran and be one of the first airlines with wifi fleetwide? Yes. But JetBlue is instead banking on a different story. It’s thinking that by putting on a superior wifi product, it will reap the benefits.

The airline clearly thinks that it’s getting close because it has ramped up talking about its offering. The first 30 airplanes will have free wifi on board. And there’s talk that there may be a free option going forward. It’s that “freemium” model where you get a base level of service for free, but you can get higher speeds if you pay.

How high will these speeds be? The airline is acting like it will be as fast as it is in your living room. I don’t know about you, but I have Verizon FiOS and I can download at over 30 Mbps. Are we talking about speeds as fast as I can get in my living room? Or are we talking about speeds as fast as someone with DSL gets? I really don’t care what’s promised. I want to see it in action.

The folks at JetBlue clearly think they’re on to something, because they’re starting to talk. I have to assume that means they are really starting to understand what they can deliver and how much it will cost. That’s encouraging. But will it be the game-changer that gets people to flee other airlines? It will at least make them competitive for those customers who want to be connected in the air, but I don’t know that it will do much beyond that. I suppose I need to reserve final judgment until I’ve had the chance to use it.

27 Responses to Can Wifi Really Be a Differentiator for JetBlue?

Jetblue’s competitive differentiation has moved beyond TV into a service orientation and a strong value proposition. It is no longer the cheapest option, but for a little more, you get legroom, checked bag, tv, etc.

I was upset they missed the wifi bandwagon, but I’ve heard usage is low on the legacies, and I have yet to be blown away by Gogo. Jetblue wants repeat business–a one off wifi sale doesn’t do them any good. Especially since they have very vocal customers when it comes to complaining, its not worth putting out a sub-par product.

Like many jetblue product launches (Even More XXX, Snacks, etc.) it’s not revolutionary but evolutionary, constantly moving up the value chain, while maintaining its roots. Perhaps this will be a big draw for BOS business, and the new a321 transcon products.

(and, as an aside, I wish the food would be substituted for virgin-like cold food)

It’s a lot harder and a lot more expensive to do wifi 40,000 feet in the air then it is to set up a garden variety hotspot at a local business that is already hardwired with some combination of phone, fiber and cable.

Ive heard of costs around $250,000 per plane. I don’t know what is inlcuded or not included in that (opportunity cost of not utilizing the a/c, testing/certifications, service contracts, etc.) But its not as easy as a McD’s putting in a $50 router and $100 of monthly service.

In addition, it is a value add at 30,000 feet as there is no alternative. If McD doesn’t offer it, starbucks does.

I think it’s an incremental improvement – textbook case of evolutionary not revolutionary. Wifi has trickled out in one way shape or form on most carriers and I think it will be very hard for B6 or anybody else to differentiate their wifi service except for pricing. In fact, slow and spotty wifi on other carriers will only muddy the water for B6’s offering because people will have preconceived notions that in-air wifi is of poor quality.

At the end of the day, wifi speed matters at home but I don’t think people will care on a 2 or even a 4 hour flight. Certainly not to the point of booking off one airline to another one. High quality wifi will certainly be another arrow in the quiver of B6’s overall approach of high quality in-air service but it will not be a differentiator.

Speed is one thing. Usability is another. Reliability…well, see usability.

If JetBlue can deliver a solid 1.5 Mbps down, 1 Mbps up connection for free to anyone on their WiFi-equipped aircraft, that’s a definite differentiator. Sure, it won’t be like my cable connection (50M down, 5M up, low latency), since we’re talking about bouncing signals to a satellite and back to the ground, but I’ve used both Gogo and Row44 and neither meet the spec above (which, honestly, is rather modest).

A rhetorical question: Whatever happened to the idea that airlines are supposed to provide safe, reliable transportation, not entertainment?

In reading many comments on air travel, they tend to focus on the ancillaries (non essentials) like wi-fi, IFE, flight attendant attitudes, etc. instead of little things like safety and reliability (which have been improving overall). Of course, airlines, statistically speaking, are extremely safe, so maybe safety is simply taken for granted nowadays (I can remember when it wasn’t). One must give the airlines and their employees a huge tip of the cap for their stellar safety record in recent years in spite of the financial challenges the industry has endured.

When I travel, my main priorities are a reasonably comfortable seat (which is why I tend to avoid Southwest), a decent fare and getting where I’m going on-time and in one piece, not being entertained along the way (and there’s this little device called a book that one can always bring along). Having written this, I know that air travel has always been about the extras. That’s why so many whined when airlines began to “unbundle” services that were historically “free.” I also don’t travel for business, so staying connected isn’t a big issue with me. How did people get along before e-mail?

To me, jetBlue’s biggest differentiator is its checked bag policy. I don’t see too many legacies racing to copy that one. It’s too bad jetBlue doesn’t fly anywhere I’d like to go (I have little desire to go to either New York or Boston; too many nasty Yankees and Red Sox fans who think their’s are the only baseball teams on the planet).

“In fact, I can remember when one of the lures of travel was the ability to ?get away.? Now it?s about staying connected. Interesting.”

Unfortunately, the concept of traveling to “get away” died with the invention of the CrackBerry. Now, the client, and by extension the boss, demand that you be accessible 24/7, even on vacation, because technology allows it to be so. Expectations have changed, such that the life changing tax memo that could have waited a week 10 years ago now needs to be completed today, not because it has to be, but because it can be. Such is life in modern Corporate [insert name of country here].

Bill is so right…this is evolutionary but not revolutionary…yet it is a step in the right direction. Decision makers at B6 are wise to see that the bells & whistles from 10 years ago are common today; they need to keep truckin’ or become another airborne commodity.
Flashback to the analog 1980s: AA was the vanguard of industry inovAAtion. Frequent flyer program, regional lift contracts, revenue management, turnkey hubs (ok, that didnt work out so well), etc. All of that became industry standard and AA floundered in stasis and eventual decline. IMHO if any airline’s management is “hip” enough to catch the wave of the Next Big Thing it would be Forest Hills. A consistent, stable and usable wi-fi system is a step in the right direction.

What concerns me here is that B6 may be setting expectations too high. I’m skeptical that their wifi offering is going to be monumentally better than what you can get on other airlines, so to parrot what others have said, this strikes me as evolutionary, not revolutionary. jetBlue has done a pretty good job over the years of differentiating itself as a “high quality” alternative to the legacies, and now they run the risk of marring that if they end up running a crappy wifi service (or at least one that isn’t measurably better than what the competitors are offering).

Then again, even if they can deliver FiOS at 35,000 feet, I’ll be cooling my jets a bit longer unless I’m flying to BOS, since that’s the only B6 nonstop destination from DFW…

I guess it depends a little on the length of flight and also if you can use when on the ground as you want to maximise use if you are paying. I do recall using Virgin America’s early service as I was able to stream live sport from Australia whislt I was on a business trip to the US which was pretty cool.
I also remember the Jetblue “wifi aircraft” which I saw in Fort Lauderdale:http://www.jetphotos.net/viewphoto.php?id=6242123

Nice to see an airline taking a moment to process the decision and selecting the best option for customers. The decision to install TVs was likely well thought out as should this decision. Granted it is a bit late, but as a customer I never use on-board wi-fi because I feel it is of poor value. If this is done with ground-like speed and reliability I may change my tune.

B6’s marketing department better be careful about their fastest claims. They may be able to get the most bandwidth to an airplane, but as this XKCD Whatif: http://whatif.xkcd.com/31/ illustrates, the highest bandwidth on an airplane is the box of DVDs that I bring onboard in my bag, the latency I get from bringing that box of DVDs sucks. (Latency is how long it takes for the other end to respond to your request, it is as important as the bandwidth to providing a good user experience.)

Jetblue will be able to bring a high bandwidth experience, but they should be careful about claiming to provide a “home like” experience as they’re stuck by the limitations of physics and satellite communication.

The time for your request for crankyflier.com to get from the plane to the ground is about 240 ms: http://www.satsig.net/latency.htm – its then another 240ms for this wonderfully snarky airline commentary to get off the ground and back to the plane. So what is a half a second you say? That’ll happen for each individual element on this web page: The picture next to my comment, the picture of the 737 and A320 in this post, the ads, the javascript that drives this site. It’ll take at least a second for your average webpage to load.

I’m sure it’ll be better, and able to provide usable wifi to all 150 people, but will it be homelike? No.

The uptake on wifi across all carriers is so dreadful, and has been for years, that I wonder if the technology is anywhere near within a galaxy of the pricepoint people are willing to pay (likely near zero). “But I’d gladly pay…” sure you would, but the take rate is in the low, low single digits, so you may be the only one. TV isn’t much better, and considering B6′ average fares are some of the lowest in the industry and VX is cruising toward (past?) a billion dollars up in flames, I think it’s pretty conclusive that no one is willing to pay a premium for wifi or tv….yet. But it’s only been a decade and a half. Maybe this year is different!

Jetblue has stated that it will offer it for free on first 30 planes. Then some kind of tiered offering to allow people to view free (input true blue number, ads, speed throttling, etc.). I dont like paying $12 for unreliable gogo, and that’s why I don’t do it often. Either a lower price or better service would increase my usage.

With regards to wifi speed, there are really two use cases for this technology: (1) simple browsing/shopping/email and (2) entertainment. If JetBlue can get a reasonably reliable connection (no long drops) and reasonable speed, then case 1 is solved. Many airlines offer this today. It would be a technological marvel if an airline could get a connection that would allow 100 people to stream video or music to satisfy use case 2.

How is this different from what UA is installing on the A319/320 and widebody fleet?
It seems since both systems are powered by ViaSat.
Since UA has a large fleet from LiveTV as well, I will assume they will be able to uptake this as well. I mean UA has announced they will support wifi on the 737 fleet as well, but have not provided a timeline.

Kevin – Well, the stuff United is installing now on the pre-merger UA fleet (and the international fleet) is the Ku band Panasonic system that is supposed to be slower. But you’re right, the Continental airplanes with LiveTV will be getting this exact same system.

The advantage of losing on the early bet is that they can deploy a 3rd generation product from the start. Yeah, it is later to market than the others but they don’t seem to have lost much business because of it.